BOE warns on house price correction

spacey2012

Who benefits if they crash ?
The banks, build it up knock it down, buy low sell high.
Same old story since time began.

Graham_Devon

purch wrote: »

You'd be rather silly to think that there won't be a correction at some stage.

NO market goes up, or down forever.

How sharp the correction is, when it comes will depend very much on the price action leading up to it.

The more momentum into an over bought situation you get in a market, the sharper the correction will be.

That's trading 101.

Quite something for the BOE to warn about it though isn't it?

Have they ever done this in the past?

Seems they are trying to either A) state something so that they cannot be held to blame when it all goes wrong or trying to cool confidence..... or a bit of both.... without having to actually implement further policies.

Or maybe they are simply preparing us for further action. Much talk of borrowing ratios at the moment.

purch

Graham_Devon wrote: »

Quite something for the BOE to warn about it though isn't it?

Unfortunately in the world of 24/7 News, everytime anyone say's anything it gets treated as if it's the biggest News in the history of News.

The story doesn't give the context of the comments, or in fact very much at all.

It say's "he told an audience"

Not really News anyway. We already know the Bank is watching developments.

Graham_Devon

The telegraph goes a bit more in depth.

It seems that house prices are now the biggest risk to the economy....

“There will always be a number of blinking warning lights – risks generated at home and risks coming from abroad – on our dashboard,” said Sir Jon. “The growing momentum in the market is now in my view the brightest light on that dashboard.”

I've long said that policies like help to buy risked peaking too soon. Could prove difficult to keep prices rising for another year before the election if the BOE are coming out with stuff like the above.

I know people will do as much as they can to soften this, either by saying it's in the wrong paper or whatever, but these are pretty strong words whatever spin is put on it.

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10802661/Dangerous-to-ignore-house-price-boom-warns-BoE-deputy.html

wotsthat

Graham_Devon wrote: »

Do you seriously expect everyone to join together to sell their houses for less to each other to reduce house prices?

Why would they? Everyone wants to sell them for the highest price they can achieve. Then they log on here and start complaining houses are too high.

In a similar vein some people sell their houses in Cornish villages to outsiders for the maximum price possible then complain young people can't afford to live there.

Just a sniff of hypocrisy.

antrobus

Graham_Devon wrote: »

....most expensive flat ever has been sold for £140m....

That's vaguely interesting. It's a;

16,000 sq ft duplex apartment at the top of one of the four blocks that make up One Hyde Park

http://www.theguardian.com/money/2014/may/02/london-penthouse-sells-140-million-pounds

According to the Daily Mail the average 3 bed house these days has only 925 sq ft, so it's only the equivalent of about £8m per semi. Not bad considering the loaction and the view, even if it is a shell.

Graham_Devon

wotsthat wrote: »

Why would they? Everyone wants to sell them for the highest price they can achieve.

Normally as they need to because they need to buy somewhere else.

This is basic stuff. No point selling your house at a lower valuation in order to make your point. Not when your next house is now even further away due to your own actions.

You keep suggesting and making statements that people should sell their houses for a price lower than what they can achieve to make their point on house prices. You don't seem to realise how ridiculous a statement this is.

Fine, if the seller of the house your are buying is doing the same thing.....but otherwise, you are just shooting yourself in the foot and making the houses you believe are expensive even more expensive for yourself as you've sold yours off "cheap" to make a lone voice point.

I often feel you've just completely run out of anything to say when you come up with these absurd suggestions.

wotsthat

Graham_Devon wrote: »

You keep suggesting and making statements that people should sell their houses for a price lower than what they can achieve to make their point on house prices. You don't seem to realise how ridiculous a statement this is.

Err..lower house prices require people to sell their houses for lower prices. Not my fault you haven't got the bottle to go first.

Do you give a s**t or not? If there are enough like minded people then maybe you'll be able to buy your next house for a lower price too.

Maybe save a little first because, as I keep trying to tell you, for all the hand wringing people generally aim to achieve the maximum price possible when they sell and the lowest price when they buy.

Graham_Devon

wotsthat wrote: »

Err..lower house prices require people to sell their houses for lower prices. Not my fault you haven't got the bottle to go first.

Yes, because if one person sells their house at a lower price, the rest of the country will follow.

I can't believe you even think it's a serious enough suggestion to even type it.

No need to go on about "how do you think price falls work then". I'm aware how they work. It takes a combination of credit, time on market, confidence, employment etc etc etc. It doesn't take one person making a stand.

wotsthat

Graham_Devon wrote: »

Yes, because if one person sells their house at a lower price, the rest of the country will follow.

That's the point - they won't.

There's a simple reason. Despite your perception that the public mood is changing and rising prices are now seen as bad no-one really gives a s**t.

Even you don't care beyond posting stuff about help to buy, bubbles and the like on a closed forum plus, no doubt, the odd chunter in the office.

You passionately believe house price are too high and, as far as I can see, you do absolutely nothing about it. If you can't be bothered why should anyone else?